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Old 09-26-2022, 08:36 AM
 
9,229 posts, read 8,494,987 times
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Quote:
Originally Posted by EDS_ View Post
Igor you are a smart guy. I want to pre-apologize because some of this will seem condescending.

1. The US economy from about 1750-1910 sucked just about all the time. Overlapping banking crises, short term price instabilities, overlapping recessions (many very severe and long lasting (FE The Long Depression - really a depression from 1873-1879, then recessions and bank panics, then the panic of 1893-1896).

1.1. In 1907 there was a near total banking meltdown. Famously, JP Morgan using some of his own money and JD Rockefeller and others literally saved the economy from ruin by being bank stocks.

1.2. It was decided that society could not count on rich guys to save the nation every time there was a banking panic..........thus The Fed.

1.3. IMO it took decades for The Fed. to wise up and shift from a policy of bank protection as its key driver to one of overall economic health. FE it's pretty obvious to me that The Fed. made The Great Depression worse than it otherwise would have been via increasing rates and shrinking the effective money supply early in '29-'31 in efforts to protect banks. Since the end of WWII The Fed. has generally done a good job managing the economy. Exceptions being the '70s and Greenspan's failures leading up to 2008.

1.4. Would you prefer a pan-congress banking committee including Bernie Sanders, Charles Schumer etc. running macro-money policy?


I don't like WIKI much but this is a fairly detailed list of US recessions
https://en.wikipedia.org/wiki/List_o..._United_States
Thank you for this informative, factual response.
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Old 09-26-2022, 08:37 AM
 
19,490 posts, read 17,717,036 times
Reputation: 17024
Quote:
Originally Posted by foulball View Post
I have to push back on this. As a whole, boomers aren't wealthy. In fact, their children are probably multiple times more wealthy on a given day.

Plus, money alone does not define wealth. There are other factors like life experience. For example, someone, near the end of their life, who has $1 mil but had to save every penny and couldn't travel around the world is not as wealthy as someone with less money, but is worldly.
I take your points but.....per wealth over the generations your claim is simply not correct across the numbers. According to Bloomberg in 2021 Boomers held 10X more wealth than Millennials and 2x more wealth than GenX.
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Old 09-26-2022, 08:51 AM
 
Location: Warwick, RI
5,426 posts, read 6,184,705 times
Reputation: 9314
Quote:
Originally Posted by foulball View Post
I have to push back on this. As a whole, boomers aren't wealthy. In fact, their children are probably multiple times more wealthy on a given day.

Plus, money alone does not define wealth. There are other factors like life experience. For example, someone, near the end of their life, who has $1 mil but had to save every penny and couldn't travel around the world is not as wealthy as someone with less money, but is worldly.
Travel and "experiences" don't mean a whole lot to me. I've traveled a bit over the years, and all you get out of it is a few memories and photos that you hardly ever look at. I work, save and invest not to become wealthy for myself, but for the peace of mind that comes with knowing that if anything happens to me, my wife is taken care of, and my children will benefit. When I'm on my death bed, the only thing I'll care about is knowing that I raised 5 good, strong children, and knowing that I'm leaving them a financial legacy that will benefit them in their retired years. In the end, raising my 5 kids has been the "experience" of my lifetime, and I'll die happy knowing that I'll be leaving them something to help them along. Children are the only real legacy that any of us leave behind.
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Old 09-26-2022, 08:56 AM
 
5,528 posts, read 3,199,435 times
Reputation: 7752
Wrong on the Fed, right on the banks.

The level of finance in the economy is too high. It's not as high as 05-08 but that's the wrong barometer.

We are creating debt anticipating that future growth will cover it. But the primary input to the growth rate, population, is about to fall. We need to start curtailing our expectations for the future because we simply won't be able to grow at rates like in the past.

Re: working class. I think it's unhealthy for democracy to have as much wealth inequality as we do. No middle class, no democracy. There are concerns beyond maximizing the growth rate that society should tend to.
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Old 09-26-2022, 08:57 AM
 
19,490 posts, read 17,717,036 times
Reputation: 17024
Quote:
Originally Posted by LookinForMayberry View Post
It's interesting. I posted this in the Economics forum rather than the Political as a litmus test to see just how smug and mean spirited -- or open to debate and ready to explain the populace was here. On the whole, I'd say this forum is marginally better than the political.

To the respondents that chose to assume I was speaking for my self rather than the lower middle economic class, and then mildly chastise my assumed plight and ignorance, you scored lower than most.

For the record, DH and I have invested in both the stock/bond and real estate markets, so we've managed to remain in the middle-class, but only because we chose to remain childless, and live within our means.

The bottom line is that it IS historic fact that we still have recessions, and for decades the middle-class (that has historically fueled the US economy) has indeed eroded and in recent decades the number of people falling into poverty on a daily basis has been rising. The Fed continues to make decisions to worsen the situation. The article I linked to illustrates such.

So, while the majority of you sit in your comfort blaming the victims of this state of affairs, think about the fact that this situation is contributing to the general decline of our country in the world standing.

Here in the northwest, while Russia is looking west, China is looking east. Our precious real estate market is being driven up by Chinese and Indian buyers, many who buy properties sight unseen. While economically comfortable people like yourselves are telling yourselves how much better things are here, realise that we look like ripe plums on the world view. Because we've economically crippled more than half of our population, we are so busy squabbling over the economy that remains that we are not seeing the bigger picture.

I've not looked into how much of our more liquid assets, like stocks/bond are held by foreign entities. I cannot do so as easily as watching real estate sales, but I would guess that it's much the same.

Does that still give you the same smug assurance that the respondents here chose to offer my OP?
1. To be fair your opening thesis statement contains, "I."

2. We still have recessions mostly because a hot and cold economy over time yields greater growth and lower average unemployment than a warm economy over the same span. Also covid.

3. Your point about middle class people falling into poverty is incomplete. Over the last several decades the middle class has shrunk by about 11%. However, from the 11%, 4% moved into the lower income classes and 7% moved into the upper income classes and poverty rates have decreased most places.

4. Per you comments on The Fed. making things worse. Things were way worse for the working poor and lower middle classes pre-Fed. than now there is no question about that. Where would you be if the Fed. had not jumped in with both feet in 2020? Recall due mostly to covid lockdowns real-GDP was down not quite 35% over the first half of '20.
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Old 09-26-2022, 09:05 AM
 
19,490 posts, read 17,717,036 times
Reputation: 17024
Quote:
Originally Posted by treasurekidd View Post
Travel and "experiences" don't mean a whole lot to me. I've traveled a bit over the years, and all you get out of it is a few memories and photos that you hardly ever look at. I work, save and invest not to become wealthy for myself, but for the peace of mind that comes with knowing that if anything happens to me, my wife is taken care of, and my children will benefit. When I'm on my death bed, the only thing I'll care about is knowing that I raised 5 good, strong children, and knowing that I'm leaving them a financial legacy that will benefit them in their retired years. In the end, raising my 5 kids has been the "experience" of my lifetime, and I'll die happy knowing that I'll be leaving them something to help them along. Children are the only real legacy that any of us leave behind.
Good for you.

It's sounds overly-transactional but my wife and I agreed before we married that our interlocked goals would be:

A. To raise outward looking inquisitive kids and more or less demand they do well in school through graduate or professional school and that we would pay every cent.

B. To make enough money to pay for A. live well and leave our kids and grandkids enough to at least pay for all grandkids to enjoy the same educational ops. our kids had.

Exigent circumstances noted I'll die happy as well.
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Old 09-26-2022, 09:08 AM
 
19,490 posts, read 17,717,036 times
Reputation: 17024
Quote:
Originally Posted by Avondalist View Post
Wrong on the Fed, right on the banks.

The level of finance in the economy is too high. It's not as high as 05-08 but that's the wrong barometer.

We are creating debt anticipating that future growth will cover it. But the primary input to the growth rate, population, is about to fall. We need to start curtailing our expectations for the future because we simply won't be able to grow at rates like in the past.

Re: working class. I think it's unhealthy for democracy to have as much wealth inequality as we do. No middle class, no democracy. There are concerns beyond maximizing the growth rate that society should tend to.
Good points but in PPP terms we have the richest middle class in the world outside some special circumstance micro-economies.
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Old 09-26-2022, 10:01 AM
 
9,229 posts, read 8,494,987 times
Reputation: 14764
Quote:
Originally Posted by EDS_ View Post
1. To be fair your opening thesis statement contains, "I."

2. We still have recessions mostly because a hot and cold economy over time yields greater growth and lower average unemployment than a warm economy over the same span. Also covid.

3. Your point about middle class people falling into poverty is incomplete. Over the last several decades the middle class has shrunk by about 11%. However, from the 11%, 4% moved into the lower income classes and 7% moved into the upper income classes and poverty rates have decreased most places.

4. Per you comments on The Fed. making things worse. Things were way worse for the working poor and lower middle classes pre-Fed. than now there is no question about that. Where would you be if the Fed. had not jumped in with both feet in 2020? Recall due mostly to covid lockdowns real-GDP was down not quite 35% over the first half of '20.
Yes, and I was told exactly what I wrote. The respondents' errors in assumption was that I invested as advised. I did not. I was lucky in that I was also paying attention to what was happening in the world. I still am, and I look at the big picture. While your numbers are more than likely accurate for the few that fell into the category of economics you address, there are many more that never have the advantage of being able to invest at all. Many of that middle class that remain are hanging on by their teeth and they are wearing dentures, so to speak.
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Old 09-26-2022, 10:16 AM
 
29,814 posts, read 11,392,344 times
Reputation: 18336
Quote:
Originally Posted by MKTwet View Post
You need to take some economic courses and learn why and how we got here. We are fortunate that the dollar is still the world currency, when it is no longer valued. That's when the real suffering and pain comes.

You look at other countries where their currency is worthless on the exchange market. They don't even have a stock market, no value.

Once the economy tanks, perhaps a new president will reverse course. But, there is no easy fix. We better hope there's basic universal income soon otherwise it will be a lost decade(s).

I believe the feds actions as well as congress in over printing and spending money will kill the dollar. Seems like the are bent on doing just that.
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Old 09-26-2022, 10:58 AM
 
464 posts, read 309,334 times
Reputation: 779
Quote:
Originally Posted by LookinForMayberry View Post
It's interesting. I posted this in the Economics forum rather than the Political as a litmus test to see just how smug and mean spirited -- or open to debate and ready to explain the populace was here. On the whole, I'd say this forum is marginally better than the political.

To the respondents that chose to assume I was speaking for my self rather than the lower middle economic class, and then mildly chastise my assumed plight and ignorance, you scored lower than most.

For the record, DH and I have invested in both the stock/bond and real estate markets, so we've managed to remain in the middle-class, but only because we chose to remain childless, and live within our means.

The bottom line is that it IS historic fact that we still have recessions, and for decades the middle-class (that has historically fueled the US economy) has indeed eroded and in recent decades the number of people falling into poverty on a daily basis has been rising. The Fed continues to make decisions to worsen the situation. The article I linked to illustrates such.

So, while the majority of you sit in your comfort blaming the victims of this state of affairs, think about the fact that this situation is contributing to the general decline of our country in the world standing.

Here in the northwest, while Russia is looking west, China is looking east. Our precious real estate market is being driven up by Chinese and Indian buyers, many who buy properties sight unseen. While economically comfortable people like yourselves are telling yourselves how much better things are here, realise that we look like ripe plums on the world view. Because we've economically crippled more than half of our population, we are so busy squabbling over the economy that remains that we are not seeing the bigger picture.

I've not looked into how much of our more liquid assets, like stocks/bond are held by foreign entities. I cannot do so as easily as watching real estate sales, but I would guess that it's much the same.

Does that still give you the same smug assurance that the respondents here chose to offer my OP?
Not to mention that the government over the years has had to come in and bail-out corporations and even buy stocks (and corporate bonds) to artificially prop-up the markets. So, all these market participants could easily be looking at multi-decade losses if the free market was left to its own devices.
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